Select Page

If you are 50 years of age or older, you have probably given some serious consideration to retirement. As a working Canadian you paid into the Canada Pension Plan every year and watched your potential pension amount grow.

Starting in 2012 there will be serious changes to CPP adjustments for early opt-in and greater rewards for later opt-in. In my opinion, the government has decided to keep your money longer and force you to remain in the work force longer if you want to reap greater rewards for allowing them to use your money all these years.

I always recommend you get accurate details from a financial advisor before you make definite plans around your retirement income, but here are some of the highlights about the proposed changes being phased in between 2012 and 2016:

  1. In 2011, your pension adjustment for deciding to take your CPP at age 60 was a 30% reduction in monthly payments. This percentage will increase incrementally each year until, in 2016, your pension will be adjusted downward by 36% if you want to claim it at age 60.
  2. A decision to claim your CPP at age 65 has been, and will continue to be, an unadjusted amount based on your qualifying amounts.
  3. Conversely, in 2011, if you decided to wait until age 70 to claim your CPP, your payment was adjusted upwards by 30%. This percentage will increase incrementally each year until 2016, at which time you will be awarded a 42% increase in your pension payments.

It seems to me that the government is asking you to gamble with the unknown in order to claim money that you earned that they took away from you because they did not think you could/would save by yourself. At a time when you are looking to getting out of the work force and enjoy life on your terms; at a time when health expectations hold no guarantees and you probably have friends who have already lost that roll of the dice, the government is penalizing you for wanting what is yours. Payment into the CPP has been compulsory, just don’t expect to get your money’s worth out of it. Hopefully you will, but….. oh, and you’ll jump through the government’s hoops to get it. The other part of this equation is that your children and grandchildren are also being penalized because they now have to wait longer for your job to open up.


Oh, and by the way, did you know CPP is taxable income?